Investment officers at Yale still taking top earnings, bonuses

As they have been for the past several years, Chief Investment Officer David Swensen GRD ’80 and his second-in-command, Dean Takahashi ’80 SOM ’83, were the two highest-paid employees at Yale in the 2008-’09 academic year, with investments director Alan Forman coming in fourth. Third on the list was University President Richard Levin, who, with $1.5 million in salary and benefits, made about a quarter more than he did the year before.

Swensen’s salary and benefits totaled $5.3 million last year, almost a quarter more than the $4.3 million he earned in the 2007-’08 academic year. His deputy, Takahashi, took home $3.5 million, a 35 percent raise from the year before.

What the filings do not make clear is how much exactly the investments officers took home in 2008-’09, since their compensation includes deferred bonuses they will be paid in the future as well as past deferred bonuses they have now been paid.

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The two men’s bonuses were based on the endowment’s long-term performance prior to last year’s disastrous negative returns. Future bonuses for Investments Office employees will reflect last year’s losses. (Facing a $300 million budget gap, University officials postponed major construction projects, cut back on spending across Yale and laid off nearly 5 percent of its staff.)

But those same University administrators — who have defended Swensen’s strategy over the past year even as he remained quiet — say that while Swensen may be paid well, it is Yale that has benefited the most from his time here. At $16.3 billion, the most recent figure available, the endowment is still worth much more what it was when Swensen came to Yale in 1985: $1 billion.

On Wall Street or even at other universities, they say, the several million Swensen makes yearly would be a pittance for an investor as renowned as he is. Endowment managers at Harvard have earned as much as $35 million recently, dwarfing Swensen’s and Takahashi’s pay.

“Here’s a guy who could make 10 times his salary,” former deputy provost Charles Long said of Swensen last April. “But his goal is to make as much money as he can for Yale.”

How much is too much? Yale's endowment has increased by a factor of fifteen since 1985, adding on average nearly $1 billion each year. And yet by taking home $5.3 million in a single year, even as budget cuts and layoffs hit the school, the #1 top earner is framed as someone who is making relatively little, "a guy who could make 10 times his salary."